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Wednesday, 5 October 2016

N1.7trn bad loans threaten banks – CBN

As the nation’s economy battles recession, there are indications that the banking industry’s stability has come under severe threat.
The financial system stability report by the Central Bank of Nigeria, CBN, sighted by
Vanguard, yesterday, indicated a steep rise in Non-Performing Loans, NPLs, as a result of prevailing economic headwinds.
Going by the report, titled Financial Stability Report’ , the most recent, which covered first half of this year, the apex bank warned that the banking sector lacks the requisite capacity to withstand the effect of the bad loans.
It stated: “The industry ratio of non-performing loans net of provision to capital increased significantly to 30.9 per cent at end-June 2016 from 5.9 per cent at end-December 2015, depicting weak capacity of the sector to withstand the adverse impact of non-performing loans.
“Non-performing loans in the period under review grew by 158 per cent from N649.63 billion at end-December 2015, to N1.679 trillion at end-June 2016.”
According to the CBN, the industry wide NPL ratio rose to 11.7 per cent in June from 5.3 per cent in December 2015, exceeding the prudential limit of 5.0 per cent.
Analysing the capital adequacy of the banks in terms of rising NPLs, the CBN said: “During the period under review, indicators of capital adequacy showed marginal declines in the Nigerian banking sector, compared with the positions in the preceding and corresponding periods of 2015.”
The CBN, however, noted that only five large banks showed resilience to the rising credit risk, even at the point of a 200 per cent increase in the NPLs, while the others showed vulnerabilities.
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5 big banks resilient
“The large banks were resilient to credit risk and would be able to sustain an impact of the most severe shock of a 200 per cent rise in NPLs as it resulted in 12.60 per cent Capital Adequacy Ratio, CAR, which was above the 10 per cent minimum requirement.
“However, banking industry, medium and small bank groups, showed vulnerability to the most severe shock of 200 per cent rise in NPLs as their CAR fell to 8.01, 2.51 and -83.32 per cent respectively,” the CBN disclosed.
According to the CBN, the rising credit risk will be occasioned by increased loan impairments, resulting from the depreciation of the Naira, inability of obligors to service foreign currency-denominated loans, as well as bank exposures to the oil and gas sector.
Continuing, the CBN noted: “Assets quality, measured in terms of the ratio of non-performing loans to gross loans, weakened in the first half of 2016, deteriorating by 6.4 percentage points to 11.7 per cent at end-June 2016.
“The prevailing inflationary trend and the liberalisation of the foreign exchange market, which witnessed significant depreciation of the Naira/Dollar exchange rate, during the second quarter of 2016, contributed to the decline in assets quality.
“These developments led to increased cost of funds and constrained borrowers’ ability to service outstanding loans, thereby increasing default risk.”
The weak performance of the banking sector in the first half of 2016 came against the backdrop of a huge drop in the market share and deposit base of big banks.
The CBN noted: “In terms of size of assets and deposit of banks, the market share of the five largest banks in the first half of 2016 declined to 43.30 and 51.96 per cent, from 60.61 and 52.94 per cent in the second half of 2015 respectively.
“The market share of the largest banks’ deposits and assets stood at 12.84 and 13.52 per cent respectively in the first half of 2016.
“The remaining 18 banks had market shares ranging from 0.21 to 6.58 per cent in deposits and 0.26 to 6.41 per cent in assets, reflecting low competition in the market.”
Despite the gloomy picture, the CBN projected that the country’s financial system would remain resilient and adaptive to macro-economic shocks.
“While challenges remain in both the global and domestic financial systems, the bank (CBN) is confident that its current proactive surveillance measures would ensure the stability and safety of the system in the near term.”

back-to-school: Pupils of Babs Fafunwa Millennium Senior Grammar School, Ojodu, at the assembly ground on their first day in school, Monday.

ON the lips of many Nigerians across the country are lamentations and tales of woe as hardship occasioned by the prevailing wind of recession bites harder. Apart from feeding, a host of the citizenry, who spoke to Vanguard,
said they are finding it difficult to meet other basic needs of life.
Price of foodstuff doubles in Imo, Jigawa: The current hardship sweeping across Imo State, hit a feverish pitch, weekend, as the prices of some major staple foods have gone out of the reach of many families. Vanguard’s check at markets in Owerri revealed that most food items had gone up by 100 to 150 percent in the state.
A bag of rice now goes for between N23,000 and N25,000, as against N8,000 in 2014. Similarly, 30-litre container of palm oil that was sold for N5,000, now goes for N12,500, while a measure of beans now sells for N1,500 as against N500. A tiny ball of onion sells for between N10 and N20, depending on the bargaining power of the buyer, as a small paint bucket of garri, which was sold for N300 now goes for between N700 and N850.
Most residents who spoke to Vanguard said that their purchasing power has gone down so badly that they are barely managing to survive.
“We have either deleted completely or reduced the frequency of serving some foodstuffs in my family’s menu. Food items have really gone out of the reach of poor people in Imo State”, a widowed mother lamented. Continuing, the anguished mother said: “My children and I have been surviving by sheer God’s grace. It has not been easy to pay our medical bills and the children’s school fees”. A staff of one of the ministries in Owerri, said it has not been easy for Imo workers and pensioners.
Salaries and pensions
“It is no longer news that those of us that can be said to have received salaries and pensions, were largely underpaid for months. You can, therefore, imagine what we are passing through”, the civil servant said. In her own contribution, Mrs. Augustina (surname withheld) said that the economic situation in the country was sending heads of families crazy. I am aware that many families have adopted divergent ways to tackle the economic crisis, including withdrawal of their children from private schools”, Mrs. Augustina said.
A young man, who simply identified himself as Harrison, lamented that “the ugly situation in the country has led to massive reduction of jobs in various sectors of the economy”. Meanwhile, a visit to the red light districts in Owerri municipality at the weekend, showed that prostitution was gathering momentum. “I am in this business (prostitution) because of the hardship members of my family are passing through. We lost our father three years ago and my mother can’t get her pensions”, a young girl sobbed as she narrated her story.”
Asked if prostitution was the only way out of the economic crisis, the girl said: “Where is the capital to even start sale of groundnut or crayfish? I was given a sales job that was to give me N5,000 monthly. What can this solve for a family of seven? This is how I found myself in this business”.
She appealed to government to make good their promise of creating jobs and improving the sagging economy. A transporter, who identified himself as Onye Army, lamented that “commercial transport owners are equally finding things hard. Fuel has jumped from N87 to 145 per litre. The Naira has since been messed up by the American dollar. The costs of new and used cars have hit the skies. The same is also true of motor spare parts and this is why fares have been adjusted in line with the reality of the time”, he said.
A similar scenario obtains in Jigawa where prices of foodstuffs and other essential commodities in major markets and mini shops have rising by 150 per cent thereby throwing many households into economic chaos. The situation is worsened by the closure of Niger Republic boarder through which food items such as rice, spaghetti, macaroni, milk, vegetable oil and other assorted goods are imported to Nigeria.
The development has compelled many people especially those living in rural areas to revert to local foods such as moringa, cassava and their related leaves combined with groundnut cake popularly known as kulikuli. Even garri has been priced beyond the reach of many people. A small measure of rice is now N1,100 as against N500 while local rice goes for N800-N900 as against N350-N400 in the past. A mudu of beans is N800 as against N400, while a pack of Maggi star is N360 as against N250. A carton of Indomie noodles sold for N1,800 now costs N2,500.
A kilo of meat which sold at N800 now costs N1,200 and a kilo of fish is now N800 as against N600; kilo of chicken now costs N1,000 as against N600. A sachet of powder peak milk sold at N35 is now N50; a mudu of sugar is now N1,100 as against N600, flour cost N580 as against N350. Big pack of stick matches now costs N50 as against N25.
Asked how he is coping, Malam Abdulkahar Mohammed, said he and his family now eats twice a day. “Life isn’t easy with the increase in everything and money is hard to get. It is not easy to get job and even those with jobs, their salaries are not enough for them to cater for their daily needs. The circumstance had compelled many of us to withdraw our children from private schools back to government schools as an alternative for them to pursue their education,” he said.
Malam Aliyu Dangida, one of the parents who have withdrawn their children from private schools and enrolled them in government schools, said: “I have six children in private schools, but with the increase in their fees by over 100 per cent, I can’t afford to continue paying their fees. So, I have transferred them to government schools.”
Families cry out in Abia
Residents of Aba, Abia State have cried out over the soaring prices of foodstuffs in the market, and urged the government to introduce policies to check the trend.
Vanguard investigations revealed that some families have devised stringent measures to tackle the prevailing situation. Such measures include ‘skipping meals’ and avoiding those they classify as luxury. Some are used to taking breakfast and skipping lunch to have dinner while others take light meals to save cost. It was also discovered that some men have set up small scale businesses for their wives to generate more income for the family.
A visit to major markets in the city revealed that price of foodstuffs has sky-rocketed beyond the reach of consumers. Worst hit are the prices of staple foods like rice, beans and yam. A bag of rice sells for N21, 000 from N11, 000 while a cup of foreign rice goes for N120. It was also discovered that a bag of local rice sells for N10, 000 while a cup goes for N80.A tuber of yam sells for N700 from N400, while a bottle of Kings cooking oil has gone up from N250 to N450.
A cup of beans which was sold for N60 now goes for N90, same for carton of tomatoes which now sells for N1, 500 from N1, 200. A bowl of garri consisting of 16 cups has gone up to N600 from N400.
On the other hand, a family size loaf of bread sells for N600 from N400 while a basket of tomato fluctuates between N12, 000 and N18, 000 depending on availability. A bag of pepper, which formerly went for N12, 000 has gone down to N4, 000. A bottle of palm oil is now N400 from N200. A carton of ice fish has shot up to N13, 500 from N9, 000 while a bowl of crayfish sells for N1,500 from N1,200.
A housewife, Nnenna Nwabeke, said: “Prices of everything has shot up in the market. I used to make a pot of soup with N3, 000, but today it is no longer possible. You will spend N400 to buy only vegetable. Even the normal ice fish, which my family prefers for rice and stew now sells for N1, 500 from N500 each. The woman, who I buy fish from told me that the price of a carton of ice fish now sells for N13, 500 from N9, 000. The worst thing is that any foodstuff you buy for N100 today will soar to N200 before two days. It is a terrible situation. People are dying of hunger. The government should do something to assist the citizenry.”
Exorbitant fees
A lecturer at the Abia State Polytechnic who declined to have his name on print, lamented that he had to return his two children to the public school as he could no longer afford the exorbitant fees being charged by private school. “I have two children in higher institution, including the younger two in private school. I had to withdraw them from private school to the public one because I can no longer afford it. I’m being owed six months salary; how can I feed my family, pay bills and school fees for my children? It has been difficult for me in the last three months that we had to adjust some expenses due to lack of money. My wife runs a boutique, but she no longer gets patronage as before. It takes tact and careful planning for any family to survive this period.”
Speaking on the situation, Harold Nwanne who deals on dredging equipments in the city said the dwindling economic situation has adversely affected many businesses as families are now preoccupied with survival strategies.
He said, “There is hunger in the land; every family is now concerned with how to survive. I blame the government; yesterday’s jamboree has turned to today’s misfortune. There was a lot of miscalculation on petrol dollars; they thought that oil sales would continue even when most countries had developed alternative energy. The government should invest in social welfare and rebuild infrastructure.”
Traders record low sales: Businessmen in Aba also lamented that customers no longer patronise them.
Chairman of the National Association of Nigerian Traders, NANTS, Ariaria chapter, Deacon Michael Aniorji, said: ‘’We are finding it difficult to make sales. Our customers are complaining that they don’t have money to make purchases. It boils down to the dwindling economic situation in the country. It is high time the government introduced policies to boost the local economy. Unlike the situation before now, you can stay in the market from morning to evening without anybody asking if your wares are for sale. It is only when you make sales that you get the profit to take care of your family needs. We have the stock but no sales.’’
Recession in Bayelsa: In Bayelsa, residents have devised copy mechanisms to survive the recession as prices of food stuffs such as garri, rice, beans, and yam and bread among others soar by over 100 per cent. A bag of rice previously sold between N11, 000 to N14, 000 is now sold at N22, 000 to N24, 000. A bowl of garri formerly at N300 is now N500. A bread of N250 is now N400. A tuber of yam now goes between N500 to N1, 000 depending on size.
The dire situation in Bayelsa state has been aggravated due to the delayed and infrequent payment of salaries to workers in the predominantly civil service state where one third of the population are civil servants.
Unfortunately, the state and local governments owe their workers backlog of salary arrears following the drastic drop in federal allocations. The state government now pays half salaries to workers. This scenario has piled more misery on many families and plunged many into starvation and huge debts.
Many families hardly afford two square meals daily. Most families now skip meals and are contented with eating once daily while staple foods like garri and rice which used to be a common menu in many homes are now considered as luxury.
Many families now resort to cheap and affordable food substitutes, like coco yam and in Yenagoa for instance, many families now consume locally made bread called Madiga in local dialect, even though it is said to be high in bromate. Many parents have withdrawn their children from private schools to access the tuition free public schools in the state.
A resident of Yenagoa, Mr Akene, a father of four, said he had to withdraw one of his daughters from a more expensive school to a cheaper one while his last child who is over three years old could not be enrolled due to the economic situation. We also gathered that some parents have stopped home lessons for their children and disengaged private drivers. We gathered that most private schools have also downsized their work force or in most cases slashed workers’ wages.
In the state civil service, findings indicate that the electronic mandatory clock introduced to ensure punctuality and check absenteeism is no longer tenable as civil servants barely go to work promptly due to high transportation cost. Some residents, who cannot afford exorbitant rents in the cities have sent their families to their country homes and moved into smaller apartments.
Foodstuff business
Some understanding landlords now accept instalment payments and other concessions.
Commodity trading in food stuffs and transportation seem to be attractive now in the state. A seamstress, Miss Naomi, who abandoned her tailoring job to venture into foodstuff business, said that people are not thinking of clothes or fashion but food first. “In this present economic situation, what people are thinking is food and food. Nobody is thinking of clothes because you must eat before you think of fashion. Look around, other businesses are on standstill but at all times people must buy foodstuff, and that is why I started it.”
Now, many people go to the hinterland to buy foodstuff and fruits for sale in the city. With low construction activities, many young people have embraced commercial tricycles popularly called Keke NAPEP operators.
The hunger in the land has led to an upsurge in criminal and cult activities. A new trend of thieves have emerged, they dispose people mainly of their food stuffs, phones and electronic gadgets.
Religious centres, schools record low attendants in Ekiti
In Ekiti, the tales of lamentation are very loud as residents lament on the daily increases in price of foodstuffs, especially rice which is one of the common food consumed in Nigeria.
In Ekiti, government is the largest employer of Labour and workers dictate the pace of the state’s economy, but presently they are being owed six months salary arrears.
In-spite the parlous nature of the state’s economy, the prices of foodstuffs and other commodities keep increasing daily. For example the price of a bag of rice, which is the staple food of the people in this area jumped from N8,500 to N20,000 and locally produced one, which could serve as alternative has also moved up, almost matching the imported one
Mrs Kike Adeyemi, a clothes seller, Mrs Jumoke Ogundele, a provision seller and most of the residents, who spoke to Vanguard complained about the low inflow of money, rising costs of foodstuffs and essential commodities.
They therefore implored the federal government to finance the small scale farmers with capital and other necessary equipment to facilitate the productivity.
Private Schools are not left out of the effect of the gloomy economy as many parents have withdrawn their wards to public schools. Churches and other religious houses in the state are also suffering from the economic crunch, as many worshippers prefer to stay at home.
Lagos residents lose purchasing power
Lagos residents are also groaning over the hike in prices of goods and services in the country.
Some corporate organizations are laying-off staff,while many parents have withdrawn their children from private schools and enrolled them in public or less expensive schools.

N1.7trn bad loans threaten banks – CBN

Catholic church tackles South East governors over herdsmen

THE governors of the five South East states of Abia, Anambra, Ebonyi, Enugu and Imo have now become the butt of criticisms from the church and some rights groups over the poor handling of the crises arising from the incessant attacks by Fulani herdsmen on the people of the area.
Herdsmen armed with sophisticated weapons had consistently attacked unarmed farmers in both their farms and houses without the governors condemning the attacks or even meeting to speak with one voice over the issue.
However, Enugu State which was most affected has lost about 43 innocent souls following the attack on Nimbo in Uzo Uwani Local Government Area, Atakwu in Akegbe Ugwu and Umuleshi in Awgu Local Government Area.
However, the latest second major attack at Nkpologu/ Nimbo axis of Enugu which led to the kidnap of a Catholic Church priest, Emmanuel Dim and the shooting of two other priests Rev. Frs. Jude Chukwuneke and Jude Ezeokana who were in the same vehicle with him, opened the floodgate of condemnations of the governors whom the people said had abandoned their basic roles of providing security for lives and property as the chief security officers of their states.
Addressing reporters at the Assumption Cathedral, Nnewi, Director of Communication in the diocese, Rev. Fr. Hyginus Aghaulor, alleged that suspected Fulani herdsmen, armed with AK47 rifles attacked and kidnapped the Rector of Tansi Major Seminary, Rev. Fr. Dim adding that the kidnappers had called and demanded N2.5 million ransom for his release.
Aghaulor however, said the “Catholic Bishops Conference of Nigeria, CBCN, has directed that ransom should not be paid for any of the church’s kidnapped priest pointing out that anybody waiting for payment of ransom for the release of any priest kidnapped was wasting his time.”
According to him, “anybody or group of persons waiting for the payment of ransom for the release of any priest were on their own.” In a statement entitled: “Fulani Herdsmen kidnaps Rector of Tansi Major Seminary, Onitsha, demands for ransom” the church further said the incident happened on September 25, 2016, around 7pm along Nkpologwu/Nimbo Road in Enugu State.
The statement read, “The three Catholic priests were returning from Nsukka to Onitsha and Nnewi respectively, after a condolence visit to Rev. Fr. Uchenna Ezeh of Nsukka Diocese who lost his mother, when they were attacked and Rev. Fr. Dim was kidnapped while the other two priests escaped with bullet wounds.
“While Rev. Fr. Dim is still being held by the herdsmen kidnappers who are demanding a ransom of N2.5 million, Rev. Fr. Ezeokana, who lectures in both Fr. Tansi Major Seminary Onitsha and Nnamdi Azikiwe University Awka, received treatment briefly at a hospital in Nsukka, but is now nursing his wounds at Awka his home Diocese.
“Rev. Fr. Chukwuemeka, who is the Chaplin of St Camillus de Lellis Chaplaincy, Collage of Health Science, Nnamdi Azikiwe University, Nnewi, who was shot on the head has been transferred from Memphis Specialist Hospital Enugu to Nnamdi Azikiwe University Teaching Hospital, Nnewi, where he is presently receiving treatment
“Another Catholic priest Rev. Fr. Emmanuel Ugwu was kidnapped on August 9, 2014 along Ugwuogo-Nike-Opi and a few weeks ago a senior seminarian was killed in cold blood in Attakwu, Enugu State, and one begins to wonder if Catholic priest have become endangered species.”
A visibly angry Aghaulor lashed out at the South East Governors for doing nothing to protect people they are governing, “while their counterparts in the North are influencing the Federal Government in spending billions of naira to contain the Boko Haram insurgents, when something more worrisome and sinister than the activities of Boko Haram is being done in South East by the Fulani Herdsmen.
“The South East Governors and their Chairman have done nothing to protect the people of South East, the Enugu State Governor whose state is where the menacing activities of the herdsmen is worst and the state legislators have not done anything to protect the people there, they should borrow a leaf from Governor Ayo Fayose of Ekiti State.
“We are in a federalism, and each state have the right to make certain law governing them, what prevents Enugu State government from making laws that can protect the people there? Governors of South East and their state Assemblies should make laws that will protect their people.”
Rev. Fr. Aghaulor lamented that since Nigeria, came into being, nobody has seen the levels of killing that are being perpetrated by the Fulani herdsmen, adding that “while innocent people are left unprotected, we have seen a barrage of military wares and personnel protecting the pipelines in Niger Delta, as if oil is more important than people’s lives. Why should people be killed without provocation in their own traditional lands?
“We are asking the government for how long would this continue, is this the type of country we all signed up for, is this part of the change, are there no rules and laws in this country, all over Nigeria women are being raped, people are intimidated, innocent Nigerians are being slaughtered and property worth billions of Naira destroyed by the suspected Fulani Herdsmen.”
The Owerri Diocese of the Catholic Church also condemned the poor attitude of the south east governors towards the people they govern, wondering what had gone wrong. Rights group, Civil Rights Realisation and Advancement Network, CRRAN, also slammed the governors of the five South Eastern states for not doing enough to curtail the dastardLY activities of the Fulani herdsmen who commit all sorts of atrocities in the land.
President of CRRAN, Olu Omotayo, accused the governors of treating “the gory and sorry security situation in the geo-political zone with kid gloves.”
Reacting to the attack on the three reverend fathers and subsequent kidnap of one of them, CRRAN, said that the Igbo was sitting on a keg of gun powder without realising it and pointed out that until the herdsmen arrested over the past attacks in Enugu State were charged to court, the ugly incident might continue unabated.
“The worsening security situation in Enugu State and Southeast states become worrisome due to the inactivity of the governors of the various southeast states who are handling this security challenge with kid gloves.
“We support the position of the Catholic Diocese of Nnewi who through Rev Fr. Aghaulor maintained that the southeast governors are doing nothing to protect the people they are governing. “The position of the Catholic Diocese of Nnewi supported our position that Enugu and sister states in the zone are treating this urgent security matter as a political matter.
“We had before now maintained that until the herdsmen arrested in connection with previous attacks in Enugu state are charged to court, these attacks will continue,” Omotayo said.

Catholic church tackles South East governors over herdsmen

Igbo leaders slam FG over Islamisation agenda

Leaders of Thought yesterday accused the Federal Government of pursuing an Islamisation agenda of the country, using the current killings of Nigerians across the country by Fulani herdsmen as reasons for the allegation.
They also dismissed the “Electoral Reform Committee,” set up by President Buhari last week, saying that “It has nothing to do with us.”
The Igbo Leaders of Thought made this known during their meeting at Zodiac Hotel, Enugu.
Chairman of the Leaders of Thought, Prof Ben Nwabueze, who spoke shortly after their opening session, said that the “Islamisation agenda of the President Muhamadu Buhari’s administration “is real.”
Among those who attended the meeting included Prof. Ben Nwabueze, SAN, former Governor of Anambra State, Dr Chukwuemeka Ezeife, former National Secretary of Ohanaeze Ndigbo, Chief Nduka Eya, former Director-General of the National Orientation Agency, NOA, Prof. Elochukwu Amucheazi, former Chairman, Senate Committee on Aviation, Senator Anyim Ude and the National Chairman of Igbo Women Association, IWA , Chief Marie okwo

They also included Chief Enechi Onyia, SAN; Prof. Race Achara, former WAEC Registrar; and traditional ruler of Ndikelionwu in Orumba Local Government Area of Anambra State, Prof. Chukwuemeka Ike; Archbishop Emeritus of the Awka Diocese of the Anglican Communion, Most Rev. Maxwell Anikwenwa; Prof. Lawrence Ocho, and former Vice Chancellor of Anambra State University of Science and Technology, ASUTECH and traditional ruler, Prof. Chiweite Ejike.
Speaking to newsmen, Prof Nwabueze said: “This is a very crucial meeting for us because we have not met for more than a year. And if you look at our agenda, such critical issues for discussion, issues like Islamisation agenda and its impact on the unity of the country.
“Islamisation agenda is real, it’s not something that somebody has just conjured up. It’s there. And it’s being implemented gradually.
“Look at the security agencies; every aspect of security , Muslims are in control in its entirety. They are doing it methodically; the way they are going about its implementation. Look at Fulani herdsmen menace, it is part of it.”
On the renewed agitation for Biafra, he said: “The agitation for Biafra, you will appreciate what is going on, to box the Igbo, to box them so that they will say, ah we are pulling out.
“And then, they will launch the final solution to the Igbo problem. Our people must not play into their hands. All these agitations, I support the agitation, but define your objective.
“What do you want? Self-determination, okay; that is the best thing, use it as a cover, don’t come out openly and say you are agitating because you want the sovereign state of Biafra. Sovereign state of Biafra within sovereign Nigeria? You have to be extremely tactful.
“On the Islamisation thing, we have listed a number of positions which will be embodied in the communiqué that will come out eventually. The Fulani herdsmen, our governors should meet and say we don’t want this anymore, let them go somewhere, let them open ahhhh… whatever they call it (ranches). But not here, yes these are the things we want.”